Bitcoin is too stable and boring for speculators, experts
Unusual for the cryptocurrency’s #1 stability period may indicate the outflow of speculative capital.
In the last month, bitcoins were distinguished by extraordinary stability — something similar was observed before the rally at the end of 2017. Neither good nor bad news, which is also missing in September and early October, hadn’t made a course to leave the corridor in which it is traded.
According to experts, this may indicate that the stock market is entering a phase of maturity and ceases to be of interest to speculators seeking a quick profit.
“Cryptocurrency is not so exciting… it was very stable, investors are not attracted”, — said Stephen Innes, head of the regional trading division Oanda Corp.
In his opinion, bitcoin has become boring after the big sales in the beginning of 2018, at least a significant part of speculative capital flowed into other assets, such as shares of companies engaged in the sale of medical marijuana.
With this assessment in solidarity and research Director at D. A. Davidson & Co. Jill Luria. Last year, the UPS and downs of the exchange rate of bitcoin was due to a combined effect of two factors.
It was investment by investors who are confident in the future of cryptocurrencies, and the infusion of speculative capital seeking to capitalize on the volatility of the asset and not particularly interested in his future. Now, according to him, the price has stabilized and the speculators moved on to something more suitable to their expectations.
“The volatility and trading volume — the two sides of the same coin, said Luria. — When on the market there are speculators, it is evident from the unusually high trading volume and volatility of the asset. When they are smaller, reduced trading volumes, but declines and volatility”.
Predictions about the future of the stock market, however, differ significantly. Naeem Aslam, chief analyst at TF Global Markets U.K., does not exclude that the decline in trading volume and exchange rate fluctuations can mean “surrender”, and, consequently, gradual extinction of the market.
At the same time, cryptomnesia suppose this is a good signal in their opinion, the market’s bottomed, or is about to reach and push away from him.
So, in September in this vein, expressed Mike Novogratz, large captainvalor and founder of Galaxy Digital. In his opinion, bitcoin is quite capable to grow 30%, but he claimed it could happen before the end of 2018, but then revised its forecast in favor of growth in 2019.
On Friday a similar forecast was made by the representative of Blockchain Capital Spencer Bogart. “I think bitcoin is close to its bottom, and with it a large part of the market,” he said. The expert also noted that at the end of 2017, when there was a rally, the stock market actually reacted to the bad news.
Now according to him, the market ignores good news — whether it be regular projects involving large capital or the arrival of new institutional investors. “I think it takes a bit of time — all the news will provide fuel for a fire, when the market again will go to growth,” said Bogart.